<PAGE>
DREW INDUSTRIES INCORPORATED
200 MAMARONECK AVENUE
WHITE PLAINS, NEW YORK 10601
------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 17, 2000
------------------
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of DREW
INDUSTRIES INCORPORATED (the "Company") will be held at the Hotel Crescent
Court, Second Floor, 400 Crescent Court, Dallas, Texas 75201 on May 17, 2000 at
9:30 A.M., for the following purposes:
(1) To elect a Board of seven Directors;
(2) To consider and act upon a proposal to approve the adoption of the
material terms of certain executive compensation performance goals and an
incentive compensation plan established by the Compensation Committee of
the Board of Directors;
(3) To ratify the selection of KPMG LLP as independent auditors for
the Company for the year ending December 31, 2000; and
(4) To transact such other business as may properly come before the
meeting or any adjournment or postponement thereof.
Holders of record of the Company's Common Stock at the close of business on
the 10th day of April, 2000 shall be entitled to vote on all matters to be
considered at the meeting or any adjournment or postponement thereof.
A list of all stockholders entitled to vote at the meeting will be
available for inspection for the ten days prior to the meeting at the office of
the Company and at the offices of the Company's transfer agent, ChaseMellon
Shareholder Services, L.L.C., 85 Challenger Rd., Overpeck Center, Ridgefield
Park, New Jersey 07660, and will be available for inspection at the time of the
meeting, at the place thereof.
By Order of the Board of Directors
EDWARD W. ROSE, III
Chairman of the Board of Directors
Dated: April 17, 2000
White Plains, N.Y.
NOTICE TO HOLDERS OF COMMON STOCK
IF YOU DO NOT EXPECT TO ATTEND THE MEETING, PLEASE SIGN AND RETURN THE ENCLOSED
PROXY SO THAT YOU WILL BE REPRESENTED. A POST-PAID ENVELOPE IS ENCLOSED
FOR YOUR CONVENIENCE.
<PAGE>
DREW INDUSTRIES INCORPORATED
200 MAMARONECK AVENUE
WHITE PLAINS, NEW YORK 10601
------------------------
PROXY STATEMENT
------------------------
The accompanying Proxy is solicited by Management of Drew Industries
Incorporated, a Delaware corporation (the "Company"), for use at the Annual
Meeting of Stockholders to be held at the Hotel Crescent Court, Second Floor,
400 Crescent Court, Dallas, Texas 75201 on May 17, 2000 at 9:30 A.M., or any
adjournment or postponement thereof, at which holders of record of the Company's
Common Stock, par value $0.01 per share (the "Common Stock"), at the close of
business on April 10, 2000 shall be entitled to vote on all matters considered
at the meeting.
The cost of solicitation by Management, including postage, printing and
handling, and the expenses incurred by brokerage firms, custodians, nominees and
fiduciaries in forwarding proxy material to beneficial owners will be borne by
the Company. The solicitation is to be made primarily by mail, but may be
supplemented by telephone calls, telegrams and personal solicitation. Management
may also use the services of directors and employees of the Company to solicit
Proxies, without additional compensation.
Each Proxy executed and returned by holders of the Common Stock may be
revoked at any time thereafter, except as to matters upon which, prior to such
revocation, a vote shall have been cast pursuant to the authority conferred by
such Proxy. A Proxy may be revoked by giving written notice of revocation to the
Secretary of the Company or to any of the other persons named as proxies, or by
giving a Proxy with a later date. The Proxies will be voted at the meeting for
the Directors set forth herein in the manner indicated (see "ELECTION OF
DIRECTORS"), and if no contrary instructions are indicated, in favor of the
other matters set forth herein; if specific instructions are indicated, the
Proxies will be voted in accordance therewith. This Statement and the form of
Proxy solicited from holders of the Common Stock are expected to be sent or
given to stockholders on or about April 18, 2000.
The Annual Report to Stockholders of the Company for the year ended
December 31, 1999 is being mailed herewith to each stockholder of record.
THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31,
1999, AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION (INCLUDING THE
CONSOLIDATED FINANCIAL STATEMENTS AND THE SCHEDULE THERETO) WILL BE FURNISHED TO
ANY STOCKHOLDER WITHOUT CHARGE UPON REQUEST TO THE COMPANY AT 200 MAMARONECK
AVENUE, WHITE PLAINS, NEW YORK 10601, TELEPHONE (914) 428-9098.
THE COMPANY
The Company was incorporated under the laws of Delaware on March 20, 1984.
The Company's principal executive and administrative offices are located at 200
Mamaroneck Avenue, White Plains, New York 10601; telephone number (914)
428-9098; e-mail: [email protected].
<PAGE>
VOTING SECURITIES
The Company had outstanding on the record date 11,105,854 shares of Common
Stock. Each holder of Common Stock is entitled to one vote for each share of
stock held.
PRINCIPAL HOLDERS OF VOTING SECURITIES
Set forth below is information with respect to each person known to the
Company on April 10, 2000 to be the beneficial owner of more than five percent
of any class of the Company's voting securities, which consists of Common Stock
only (including options):
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF APPROXIMATE
NAME AND ADDRESS BENEFICIAL PERCENT OF
OF BENEFICIAL OWNER OWNERSHIP CLASS
- ----------------------------------- ---------- -----------
<S> <C> <C>
Edward W. Rose, III(1) ............ 1,880,880(2) 15.6%
500 Crescent Court
Dallas, Texas 75201
L. Douglas Lippert(1) ............. 2,088,105(2) 17.3%
2375 Tamiami Trail
Suite 110
Naples, Florida 34103
FMR Corp. ......................... 1,144,200(3) 9.5%
82 Devonshire Street
Boston, Massachusetts 02108
</TABLE>
- ------------------
(1) The person named has sole voting and investment power with respect to such
shares.
(2) See "VOTING SECURITIES--Security Ownership of Management."
(3) As of December 31, 1999.
To the knowledge of the Company, other than persons acting as nominees or
custodians for various stock brokerage firms and banks, which persons do not
have beneficial ownership of the Common Stock, no other person owns of record or
beneficially more than five percent of the voting securities of the Company.
SECURITY OWNERSHIP OF MANAGEMENT
Set forth below is information with respect to beneficial ownership at
April 10, 2000 of the Common Stock (including options) by each Director and
nominee and by all Directors, nominees and Executive Officers of the Company as
a group.
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF APPROXIMATE
NAME AND ADDRESS BENEFICIAL PERCENT OF
OF BENEFICIAL OWNER OWNERSHIP CLASS
- ---------------------------------------- ---------- -----------
<S> <C> <C>
Leigh J. Abrams(1) ..................... 289,290(2) 2.4%
200 Mamaroneck Avenue
White Plains, New York 10601
Edward W. Rose, III(1) ................. 1,880,880(3) 15.6%
500 Crescent Court
Dallas, Texas 75201
David L. Webster(1) .................... 272,840(4) 2.3%
4381 Green Oaks Blvd.
Arlington, Texas 76016
L. Douglas Lippert ..................... 2,088,105(5) 17.3%
2375 Tamiami Trail
Suite 110
Naples, Florida 34103
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF APPROXIMATE
NAME AND ADDRESS BENEFICIAL PERCENT OF
OF BENEFICIAL OWNER OWNERSHIP CLASS
- ---------------------------------------- ---------- -----------
<S> <C> <C>
James F. Gero(1) ....................... 109,160(6) 0.9%
11900 North Anna Cade Road
Rockwall, Texas 75087
Gene H. Bishop(1) ...................... 113,600(7) 0.9%
1601 Elm Street, 47th Floor
Dallas, Texas 75201
J. Thomas Schieffer .................... 0 0
1000 Ballpark Way, Suite 300
Arlington, Texas 76011
All Directors, Nominees, and Executive
Officers as a group (9 persons
including the above-named)............ 4,846,762(8) 40.2%
</TABLE>
- ------------------
(1) Pursuant to Rules 13-1 (f)(1)-(2) of Regulation 13-D of the General Rules
and Regulations under the Securities Exchange Act of 1934, as amended (the
"Exchange Act") on May 31, 1989, the persons indicated, together with
certain other persons, jointly filed a single Schedule 13-D Statement (as
amended) with respect to the securities listed in the foregoing table. Such
persons made the single, joint filing because they may be deemed to
constitute a "group" within the meaning of Section 13(d)(3) of the Exchange
Act, although neither the fact of the filing nor anything contained therein
shall be deemed to be an admission by such persons that a group exists.
(2) Mr. Abrams has sole voting and investment power with respect to the shares
owned by him. Includes 8,004 shares of Common Stock held by Mr. Abrams as
Custodian under the New York Uniform Gifts to Minors Act for the benefit of
his children. Mr. Abrams disclaims any beneficial interest in the shares
held as Custodian. In January 1997 and November 1999, Mr. Abrams was granted
options pursuant to the Company's Stock Option Plan to purchase,
respectively, 10,000 shares of Common Stock at $12.125 per share, and 50,000
shares of Common Stock at $9.3125 per share. Although no part of such
options has been exercised, all shares subject to such options are included
in the above table as beneficially owned.
(3) Mr. Rose has sole voting and investment power with respect to the shares
owned by him. Includes 84,000 shares owned by each of Cardinal Investment
Company, Inc. Pension Plan and Cardinal Investment Company, Inc. Profit
Sharing Plan, of each of which Mr. Rose is Trustee. Excludes 100,000 shares
of Common Stock held in trusts for the benefit of members of Mr. Rose's
immediate family. Mr. Rose's wife has sole voting and investment power with
an additional 13,920 shares owned by her of record. Mr. Rose disclaims any
beneficial interest in such shares. As a member of the Stock Option
Committee, Mr. Rose was automatically awarded the following options each of
which is to purchase 5,000 shares of Common Stock: on December 31, 1995 at
$7.35 per share; on December 31, 1996 at $10.75 per share; on December 31,
1997 at $12.475 per share; on December 31, 1998 at $11.792 per share; and on
December 31, 1999 at $9.204 per share. Although no part of such options has
been exercised, all shares subject to such options are included in the above
table as beneficially owned.
(4) Mr. Webster has sole voting and investment power with respect to such
shares. In May 1997 and November 1999, Mr. Webster was granted options
pursuant to the Company's Stock Option Plan to purchase, respectively,
15,000 shares of Common Stock at $12.125 per share, and 50,000 shares of
Common Stock at $9.3125 per share. Although no part of such options has been
exercised, all shares subject to such options are included in the above
table as beneficially owned.
(Footnotes continued on next page)
3
<PAGE>
(Footnotes continued from previous page)
(5) Includes 607,265 shares held by L. Douglas Lippert as Trustee for trusts for
the benefit of members of Mr. Lippert's immediate family, over which
Mr. Lippert has sole voting and dispositive power. Mr. Lippert disclaims
beneficial ownership of such shares. Also includes 53,846 shares
beneficially owned by Mr. Lippert, which are held in escrow pursuant to
agreements with the Company providing for the delivery of such shares to
Mr. Lippert upon the occurrence of certain contingencies. See "VOTING
SECURITIES." Pursuant to Rules 13-1(f)(1)-(2) of Regulation 13-D of the
General Rules and Regulations under the Exchange Act, on October 17, 1997,
Mr. Lippert, together with certain other persons, jointly filed a single
Schedule 13-D Statement (as amended) with respect to the securities listed
in the foregoing table. Such persons made the single, joint filing because
they may be deemed to constitute a "group" within the meaning of
Section 13(d)(3) of the Exchange Act, although neither the fact of the
filing nor anything contained therein shall be deemed to be an admission by
such persons that a group exists. In November 1999, Mr. Lippert was granted
an option pursuant to the Company's Stock Option Plan to purchase 50,000
shares of Common Stock at $9.3125 per share. Although no part of such option
has been exercised, all shares subject to such option are included in the
above table as beneficially owned.
(6) Mr. Gero shares voting and investment power with respect to such shares with
his wife. As a member of the Stock Option Committee, Mr. Gero was
automatically awarded the following options each of which is to purchase
5,000 shares of Common Stock: on December 31, 1995 at $7.35 per share; on
December 31, 1996 at $10.75 per share; on December 31, 1997 at $12.475 per
share; on December 31, 1998 at $11.792 per share; and on December 31, 1999
at $9.204 per share. Although no part of such options has been exercised,
all shares subject to such options are included in the above table as
beneficially owned.
(7) Mr. Bishop as sole voting and investment power with respect to such shares.
As a member of the Stock Option Committee, Mr. Bishop was automatically
awarded the following options each of which is to purchase 5,000 shares of
Common Stock: on December 31, 1996 at $10.75 per share; on December 31, 1997
at $12.475 per share; on December 31, 1998 at $11.792 per share; and on
December 31, 1999 at $9.204 per share. Although no part of such options has
been exercised, all shares subject to such options are included in the above
table as beneficially owned.
(8) Includes 276,000 shares subject to options.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Section 16(a) of the Exchange Act requires the Company's executive officers
and directors, and persons who beneficially own more than ten percent of the
Company's equity securities, to file reports of ownership and changes in
ownership with the Securities and Exchange Commission and the exchange on which
the securities are traded. Officers, directors and greater than ten-percent
shareholders are required by SEC regulation to furnish the Company with copies
of all Section 16(a) forms they file.
Based on its review of the copies of such forms received by it, the Company
believes that during 1999 all such filing requirements applicable to its
officers and directors (the Company not being aware of any ten percent holder
other than Edward W. Rose, III and L. Douglas Lippert, directors) were complied
with.
STOCK REPURCHASE
Pursuant to authorizations of the Board of Directors, during 1999 the
Company repurchased 333,700 shares of its Common Stock at prices ranging from
$12.55 per share to $8.80 per share. As of April 10, 2000, the Company purchased
an additional 191,500 at prices ranging from $9.61 per share to $7.67 per share.
The Company is authorized to purchase up to an additional 749,200 shares.
4
<PAGE>
I. ELECTION OF DIRECTORS
It is proposed to elect a Board of seven directors to serve until the next
annual election or until their successors are elected and qualify.
Unless contrary instructions are indicated, the persons named as proxies in
the form of Proxy solicited from holders of the Common Stock will vote for the
election of the nominees indicated below. All such nominees are presently
directors of the Company. If any such nominees should be unable or unwilling to
serve, the persons named as proxies will vote for such other person or persons
as may be proposed by Management. Management has no reason to believe that any
of the named nominees will be unable or unwilling to serve. Election of
directors by holders of the Common Stock will be by a plurality of the votes
cast at the meeting, in person or by proxy, by holders of the Common Stock
entitled to vote at the meeting.
The following table lists the current directors of the Company and the
nominees proposed by Management for election by the holders of the Common Stock,
all other positions and offices with the Company presently held by them and
their principal occupations, in each case as furnished by them to the Company.
<TABLE>
<CAPTION>
NAME AND AGE DIRECTOR
OF NOMINEE POSITION SINCE
- ---------------------- -------------------------------------------- --------
<S> <C> <C>
Leigh J. Abrams ...... President, Chief Executive
(Age 57) Officer and Director. 1984
Edward W. Rose, III .. Chairman of the Board of Directors. 1984
(Age 59)
David L. Webster ..... President and Chief Executive Officer of
(Age 64) Kinro, Inc. and Director. 1984
L. Douglas Lippert ... President and Chief Executive Officer of
(Age 52) Lippert Components, Inc., Lippert Tire and
Axle, Inc. (formerly Shoals Supply, Inc.)
and Coil Clip, Inc. and Director. 1997
James F. Gero ........ Director. 1992
(Age 55)
Gene H. Bishop ....... Director. 1995
(Age 70)
J. Thomas Schieffer .. Nominee. --
(Age 52)
</TABLE>
LEIGH J. ABRAMS, since July 1994, has also been President, Chief Executive
Officer and a Director of LBP, Inc. ("LBP"). See Summary Compensation Table,
footnote 1.
EDWARD W. ROSE, III, for more than the past five years, has been President
and sole stockholder of Cardinal Investment Company, Inc., an investment firm.
Mr. Rose also serves as a director of the following public companies: Liberte
Investors Inc., engaged in real estate loans and investments; and ACE Cash
Express, Inc., engaged in check cashing services. Since July 1994, Mr. Rose has
also been Chairman of the Board of LBP.
DAVID L. WEBSTER, since November 1980, has been President of Kinro, Inc., a
subsidiary of the Company ("Kinro"), and has been Chairman of Kinro since
November 1984. Mr. Webster also served as President and Chief Executive Officer
of Shoals Supply, Inc. ("Shoals"), a subsidiary of the Company from February
1996 until August 31, 1999.
L. DOUGLAS LIPPERT, since October 1997, has been President and Chief
Executive Officer of Lippert Components, Inc., a subsidiary of the Company, and
President of the predecessor of Lippert Components, Inc. since 1978. Mr. Lippert
has also been President of Coil Clip, Inc., a
5
<PAGE>
subsidiary of the Company, since its acquisition in December 1998, and President
of Lippert Tire & Axle, Inc., (formerly Shoals) since September 1, 1999.
JAMES F. GERO, since March 1992, has been Chairman and Chief Executive
Officer of Sierra Technologies, Inc., a manufacturer of defense systems
technologies, and a director of its affiliates. From July 1987 to October 1989,
Mr. Gero was Chairman and Chief Executive Officer of Varo, Inc., a manufacturer
of aerospace technology, and from 1985 to 1987, Mr. Gero was President and Chief
Executive Officer of Varo, Inc. Mr. Gero also serves as a director of the
following public company: Orthofix International NV, an international supplier
of orthopedic devices for bone fixation and stimulation. Since July 1994, Mr.
Gero has also been a director of LBP.
GENE H. BISHOP, from March 1975 until July 1990, was Chief Executive
Officer of MCorp, a bank holding company, and from October 1990 to November
1991, was Vice Chairman and Chief Financial Officer of Lomas Financial
Corporation, a financial services company. From November 1991 until his
retirement in October 1994, Mr. Bishop served as Chairman and Chief Executive
Officer of Life Partners Group, Inc., a life insurance holding company. Mr.
Bishop also serves as a director of the following publicly-owned companies:
Paymentech, Inc., a credit card payment processor; Liberte Investors Inc.,
engaged in real estate loans and investments, and Southwest Airlines Co., a
regional airline.
J. THOMAS SCHIEFFER, nominee for election as a director, for more than the
past five years has been President and sole stockholder of J. Thomas Schieffer
Management Company, engaged in the management of financial assets and oil and
gas properties, and President and sole stockholder of Pablo Operating Company,
engaged in the operation of oil and gas properties. From January 1991 to April
1999, Mr. Schieffer was President of the Texas Rangers Baseball Team. Mr.
Schieffer is an attorney.
FREDRIC M. ZINN, not a nominee for election as a director, has been Chief
Financial Officer of the Company for more than the past five years, and has also
been Chief Financial Officer of LBP since July 1994. Mr. Zinn is a Certified
Public Accountant.
HARVEY J. KAPLAN, not a nominee for election as a director, has been
Secretary and Treasurer of the Company for more than the past five years, and
has also been Secretary and Treasurer of LBP since July 1994. Mr. Kaplan is a
Certified Public Accountant.
Directors of the Company serve until the Company's next annual meeting of
stockholders, and until their successors are elected and qualified. Executive
officers serve at the discretion of the Board of Directors. To the knowledge of
the Company, no executive officer or director is related by blood, marriage or
adoption to any other. Each of the nominees named above was elected to his
present term of office at the Annual Meeting of Stockholders held on May 20,
1999, except that J. Thomas Schieffer has not previously served as a director of
the Company. During the year ended December 31, 1999, the Board of Directors
held nine meetings. All directors attended all meetings of the Board of
Directors, except that Gene H. Bishop, did not attend two meetings.
The Company has an Audit Committee of the Board of Directors consisting of
Messrs. Rose, Gero and Bishop. The functions of the Audit Committee are to
review the Company's annual and quarterly reports, review the independence of
and ratify the selection of the independent auditors for the Company, conduct
pre-audit and post-audit reviews with both financial management and the
independent auditors, and assist in the development of the Company's annual
business plan. The Audit Committee held three meetings during the year ended
December 31, 1999.
The Company has a Stock Option Committee, consisting of Messrs. Rose, Gero
and Bishop, to determine and designate employees and directors of the Company
who are to be granted options, the number of shares subject to options, the
nature and terms of the options to be granted, and to otherwise administer the
Stock Option Plan. See "ELECTION OF DIRECTORS--Executive Compensation." The
Stock Option Committee held two meetings during the year ended December 31,
1999.
The Company has a Compensation Committee of the Board of Directors
consisting of Messrs. Rose, Gero and Bishop. The functions of the Compensation
Committee are to develop compensation policies with respect to the Company's
executive officers based, in part, on performance-related
6
<PAGE>
criteria, and to make recommendations to the Board of Directors regarding
compensation of executive officers in accordance with such policies. The
Compensation Committee held one meeting during the year ended December 31, 1999.
EXECUTIVE COMPENSATION
Summary Compensation
The following table sets forth the annual and long-term cash and noncash
compensation for each of the last three calendar years awarded to or earned by
the President and Chief Executive Officer of the Company and the Company's five
other most highly compensated executive officers (such six executive officers
collectively, the "named executive officers") during the year ended December 31,
1999.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION(1) COMPENSATION
------------------------------------ ---------------
NAME AND CALENDAR OTHER ANNUAL NUMBER OF STOCK ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS (2) COMPENSATION OPTIONS AWARDED COMPENSATION
- ------------------------- -------- -------- ---------- ------------ --------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Leigh J. Abrams(3) ...... 1999(4) $300,000 $ 404,775 $ 5,675 50,000 $5,000
President and Chief 1998(4) 300,000 $ 323,930 5,639 10,000 5,000
Executive Officer 1997 300,000 264,530 5,396 4,750
David L. Webster(5) ..... 1999 $400,000 $1,109,000 $ 3,537 50,000 $5,000
President of Kinro, 1998 400,000 $1,088,200 2,603 15,000 5,000
Inc. 1997 400,000 930,800 3,655 4,750
L. Douglas Lippert(6) ... 1999 $300,000 $ 240,807 $ 12,000 50,000 $7,403
President and Chief 1998 300,000 0 12,000 5,875
Executive Officer of 1997 73,731 0 3,000 917
Lippert Components,
Inc., Coil Clip, Inc.
and Lippert Tire &
Axle, Inc.
Edward W. Rose, III ..... 1999 $ 30,000 $ 30,688(7) 5,000
Chairman of the 1998 30,000 29,150(7) 5,000
Board of Directors 1997 30,000 31,115(7) 5,000
Fredric M. Zinn ......... 1999(4) $145,000 $ 175,828 $ 11,945 15,000 $5,000
Chief Financial Officer 1998(4) 135,000 155,344 10,237 5,000 5,000
1997 125,000 127,743 10,145 4,750
Harvey J. Kaplan ........ 1999(4) $107,500 $ 103,296 $ 8,062 7,500 $5,000
Secretary and Treasurer 1998(4) 107,500 90,296 7,823 3,500 5,000
1997 100,000 75,296 7,941 4,750
</TABLE>
- ------------------
(1) In connection with the July 29, 1994 spin-off of Leslie Building Products,
Inc. (now known as LBP, Inc.) by the Company (the "Spin-off "), the Company
and LBP entered into a Shared Services Agreement. Pursuant to the Shared
Services Agreement, following the Spin-off, the Company and LBP share
certain administrative functions and employee services, such as management
overview and planning, acquisition searches, tax preparation, financial
reporting, coordination of independent audit, stockholder relations, and
regulatory matters. The Company is reimbursed by LBP for such services,
which included a portion of the compensation to Messrs. Abrams, Zinn and
Kaplan. The agreement was extended to December 31, 2000. For the year ended
December 31, 1999, the Company was reimbursed $144,000 by LBP for such
services.
(Footnotes continued on next page)
7
<PAGE>
(Footnotes continued from previous page)
(2) Messrs. Abrams, Webster, Rose, Zinn and Kaplan, receive payments pursuant to
a discretionary retirement bonus program. These bonuses must be used to
purchase specified tax deferred annuities and/or cash value life insurance.
For 1999, Mr. Abrams received $30,000, Mr. Webster received $50,000, Mr.
Rose received $30,000, Mr. Zinn received $20,828 and Mr. Kaplan received
$13,296 pursuant to the discretionary retirement bonus program.
(3) For 1999, 1998 and 1997, Mr. Abrams received incentive compensation equal to
2 1/2% of the Company's income before income taxes and extraordinary items,
subject to certain adjustments, in excess of $13,575,000 in 1999,
$12,975,000 in 1998 and $8,190,000 in 1997.
(4) In 1998, Mr. Abrams, also received from LBP, which is not reflected in the
Summary Compensation Table, $349,726, representing incentive bonus
applicable to the gain on disposal of assets of LBP's subsidiary, of which
$82,000 was allocated by Mr. Abrams as discretionary bonuses to five
employees of Drew, including $50,000 to Mr. Zinn and $12,500 to Mr. Kaplan.
For 1998, Mr. Abrams also received an incentive bonus from LBP of $57,052,
which is not reflected in the Summary Compensation Table. In addition, in
1999, Mr. Abrams was entitled to receive from LBP an incentive bonus of
$115,475, which is not reflected in the Summary Compensation Table, equal to
2 1/2% of LBP's income from operations and investments, of which an
aggregate of $20,000 was allocated by Mr. Abrams as discretionary bonuses to
five employees of Drew, including $7,500 to Mr. Zinn and $5,000 to
Mr. Kaplan.
(5) Effective March 31, 1996, Kinro extended its employment agreement with
Mr. Webster which provides for Mr. Webster's employment through
December 31, 2001 at a salary of not less than $400,000 per annum. For 1999,
1998 and 1997, Mr. Webster received performance-based incentive
compensation, as adopted by the Company's stockholders on April 18, 1996,
equal to 7.3% of the amount by which the aggregate earnings before interest
and taxes (without deduction for costs of corporate administration or
amortization of goodwill) of (i) Kinro through December 31, 1999, and of
Shoals through August 31, 1999, exceeded $9,183,000 in 1999; (ii) Kinro and
Shoals for the year ended December 31, 1998 exceeded $10,856,000; and
(iii) Kinro and Shoals for the year ended December 31, 1997 exceeded
$10,571,000. On April 5, 2000, Mr. Webster's employment agreement was
amended. See "ADOPTION OF INCENTIVE COMPENSATION PLAN" for a discussion of
the proposal to approve and adopt an incentive compensation plan applicable
to Mr. Webster effective as of September 1, 1999.
(6) On October 7, 1997, Mr. Lippert entered into an Employment and
Non-Competition Agreement with Lippert Components, Inc. providing for
Mr. Lippert to serve as President and Chief Executive Officer of Lippert
Components, Inc. Mr. Lippert receives annual salary of $300,000 plus,
subject to certain conditions, performance-based incentive compensation
equal to 5% of the excess of operating profits of Lippert Components, Inc.
and Coil Clip, Inc. (as defined in the Agreement) over $10.1 million. For
1999, Mr. Lippert received $240,807 as incentive bonus. Effective January 1,
2000, Mr. Lippert's annual salary was increased to $400,000, and the
Agreement was extended to October 2003.
(7) See "ELECTION OF DIRECTORS -- Compensation of Directors."
STOCK OPTION PLAN
On June 13, 1995, stockholders approved the amended and restated Drew
Industries Incorporated Stock Option Plan, which was amended and restated on
June 1, 1999 (the "Plan").
Under the Plan, since 1995 the Stock Option Committee has granted
non-qualified options to purchase 1,095,140 shares of Common Stock, and is
authorized to grant options to purchase up to an additional 249,166 shares. The
249,166 shares available for grant have been allocated 45,000 shares to
Non-Employee Directors and members of the Committee and 204,166 shares to
eligible employees. No grantee, whether or not now a participant in the Plan,
can be granted options to purchase more than an aggregate of 50,000 shares under
the Plan subsequent to June 1, 1999. All options granted to date are
non-qualified options.
8
<PAGE>
The Stock Option Committee has sole and complete authority to determine the
individuals eligible to receive stock options under the Plan, and to determine
the number of stock options to be granted to eligible individuals, as well as
the terms and conditions under which grants will be made (including limitations,
restrictions or prohibitions upon the exercise of stock options), except that
Non-Employee Directors are not eligible for incentive stock options ("ISOs").
The Stock Option Committee determines the period for which each stock option may
be exercisable, but in no event may a stock option be exercisable more than 10
years from the date of grant thereof. The number of shares available under the
Plan, and the exercise price of options granted under the Plan, are subject to
adjustments that may be made by the Stock Option Committee to reflect stock
splits, stock dividends, recapitalizations, mergers, or other major corporate
action.
The exercise price for options granted under the Plan is determined by the
Stock Option Committee in its sole discretion, provided that the exercise price
is at least equal to 100% of the fair market value of the Common Stock subject
to such option on the date of grant. The exercise price may be paid in cash or
in shares of Common Stock. Options granted under the Plan become exercisable in
annual installments determined by the Stock Option Committee and may be subject
to performance criteria. An ISO may not be granted to an individual who is
treated as a "10% Shareholder" of the Company under Section 422 of the Internal
Revenue Code of 1986, as amended, unless the exercise price is 110% of fair
market value on the date of grant and the ISO is exercisable for a period not
longer than five years from the date of grant.
The Board of Directors is authorized to terminate, suspend or amend the
Plan; provided that the amendment or termination cannot affect the validity of
any then outstanding stock option previously granted under the Plan, and
provided further that the Board of Directors cannot without stockholder
approval: (a) increase the maximum number of shares covered by the Plan or
change the class of employees eligible to receive stock options; (b) reduce the
option price below the fair market value of the Common Stock on the date of the
grant of such option; or (c) extend beyond l0 years from the date of the grant
the period within which an option may be exercised. The Plan will terminate on
December 31, 2007 and no option may be granted after such termination date.
Options granted prior to the termination date may be exercised in accordance
with their terms beyond the termination date.
Each member of the Stock Option Committee is automatically awarded an
option ("Formula Option") to purchase 5,000 shares of Common Stock on the
December 31st of each year in which such Stock Option Committee member has
served not less than twelve consecutive months as a Director of the Company.
Such Formula Options vest immediately and are exercisable during the five-year
period following the date of grant. The purchase price of the Common Stock
subject to the Formula Options is not less than 100% of the fair market value
(as defined in the Plan) of the Common Stock on the date such Formula Option is
granted, subject to adjustment as provided in the Plan.
OPTION GRANTS IN 1999
The following table summarizes stock options granted during 1999 to the named
executive officers.
<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE VALUE AT
ASSUMED ANNUAL
RATES OF PRICE
APPRECIATION FOR
INDIVIDUAL GRANTS OPTION TERM
------------------------------------------------- -------------------
NUMBER OF % OF TOTAL
SHARES OPTIONS
UNDERLYING GRANTED TO
OPTIONS EMPLOYEES IN EXERCISE EXPIRATION
NAME GRANTED 1999 PRICE DATE 5% 10%
- ---------------------- --------- ------------ -------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Leigh J. Abrams....... 50,000 9.0% $ 9.313 11/29/05 $158,357 $359,258
David L. Webster...... 50,000 9.0% $ 9.313 11/29/05 $158,357 $359,258
L. Douglas Lippert.... 50,000 9.0% $ 9.313 11/29/05 $158,357 $359,258
Edward W. Rose, III... 5,000(1) 0.9% $ 9.204 12/31/04 $ 12,714 $ 28,096
Fredric M. Zinn....... 15,000 2.7% $ 8.813 11/19/05 $ 44,956 $101,991
Harvey J. Kaplan...... 5,000 0.9% $ 8.813 11/19/05 $ 14,985 $ 33,997
</TABLE>
- ------------------
(1) Represents a Formula Option.
9
<PAGE>
OPTION EXERCISES IN 1999 AND YEAR-END VALUES
The following table presents the value of unexercised options held by the
named executive officers at December 31, 1999.
<TABLE>
<CAPTION>
NUMBER OF VALUE OF UNEXERCISED
SECURITIES UNDERLYING IN-THE-MONEY
UNEXERCISED OPTIONS AT OPTIONS AT
SHARES DECEMBER 31, 1999 DECEMBER 31, 1999(1)
ACQUIRED VALUE EXERCISABLE (E) EXERCISABLE (E)
NAME ON EXERCISE REALIZED UNEXERCISABLE (U) UNEXERCISABLE (U)
- -------------------- ----------- -------------- ---------------------- ----------------------
<S> <C> <C> <C> <C>
Leigh J. Abrams..... 34,740 $289,367 4,000(E) $ 0(E)
56,000(U) $ 0(U)
David L. Webster.... 69,476 $507,071 6,000(E) $ 0(E)
59,000(U) $ 0(U)
L. Douglas Lippert.. 50,000(U) $ 0(U)
Edward W. Rose, III. 25,000(E) $8,250(E)
Fredric M. Zinn..... 34,740 $306,737 2,000(E) $ 0(E)
18,000(U) $2,813(U)
Harvey J. Kaplan.... 6,000 $ 46,853 1,400(E) $ 0(E)
9,600(U) $1,406(U)
</TABLE>
- ------------------
(1) Market value of Common Stock at December 31, 1999 ($9.00) minus the exercise
price.
COMPENSATION OF DIRECTORS
Edward W. Rose, III, Chairman of the Board of Directors, receives an annual
director's fee of $24,000, payable $2,000 per month, plus $1,000 for attendance
at each meeting of the Board of Directors and $500 for attendance at each
Committee meeting. In 1999, Mr. Rose received a $30,000 payment pursuant to a
discretionary retirement bonus program intended to provide retirement income.
Messrs. James F. Gero and Gene H. Bishop each receive an annual director's fee
of $9,000, payable $750 per month, plus $500 for attendance at each meeting of
the Board of Directors and $500 for attendance at each Committee meeting.
EMPLOYMENT CONTRACTS
See footnotes 4 and 5 to the Summary Compensation Table for a description
of the employment agreements between (i) Kinro, a subsidiary of the Company, and
David L. Webster, President and Chief Executive Officer of Kinro and a director
of the Company, and (ii) Lippert Components, Inc., a subsidiary of the Company,
and L. Douglas Lippert, President and Chief Executive Officer of Lippert
Components, Inc., Lippert Tire & Axle, Inc. and Coil Clip, Inc., and a director
of the Company.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
No executive officer of the Company serves on the Compensation Committee,
and there are no "interlocks," as defined by the Securities and Exchange
Commission.
10
<PAGE>
REPORT OF THE COMPENSATION COMMITTEE
COMPENSATION POLICY
The Compensation Committee of the Board of Directors (the "Committee")
consists of three non-employee directors, Edward W. Rose, III, James F. Gero and
Gene H. Bishop. The Committee has the responsibility of developing the policies
which govern compensation for executive officers, and making recommendations to
the Board of Directors regarding compensation of executive officers in
accordance with such policies.
The Company's executive compensation policy is designed to enable the
Company to attract, motivate and retain senior management by providing a
competitive compensation opportunity based significantly on performance. The
objective is to provide fair and equitable compensation to senior management in
a way that rewards management for reaching and exceeding objectives. The
compensation policy links a significant portion of executive compensation to the
Company's performance, recognizes individual contribution as well as overall
business results, and aligns executive and stockholder interests. The primary
components of the Company's executive compensation are base salary,
performance-related incentive compensation, stock options and discretionary
bonuses. While the components of compensation are considered separately in this
report, the Committee takes into account the full compensation package provided
by the Company to each of its executives, including pension benefits, severance
obligations, insurance and other benefits.
Each year the Committee will review the Company's compensation policy
utilizing both internal and external sources of information and analysis
relating to corporate performance, total return to stockholders of comparable
companies, and compensation afforded to executives by competitors of the
Company. If appropriate, changes will be recommended.
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER IN 1999
The compensation policy applied by the Company in establishing the
compensation for Leigh J. Abrams, the Company's President and Chief Executive
Officer, is essentially the same as for other senior executives of the
Company--to provide a competitive compensation opportunity that rewards
performance and recognizes individual contribution.
For 1999, Mr. Abrams received base compensation of $300,000, plus incentive
compensation of $374,775, equal to 2 1/2% of the Company's income before income
taxes and extraordinary items in excess of $13,575,000. Mr. Abrams receives
medical and life insurance, and certain other benefits. In 1999, Mr. Abrams was
also awarded an additional payment of $30,000 pursuant to a discretionary
retirement bonus program intended to provide retirement income. This bonus must
be used to purchase specified tax deferred annuities or cash value life
insurance contracts.
COMPENSATION OF EXECUTIVE OFFICERS IN 1999
As with the Chief Executive Officer, compensation of other executive
officers is intended to reward performance and recognize individual
contribution. Accordingly, the chief executive officers of the Company's
subsidiaries receive compensation based upon the results of operations of such
subsidiaries.
On April 18, 1996, effective as of January 1, 1996, the stockholders of the
Company approved the adoption of a performance-based incentive compensation plan
applicable to David L. Webster, President of Kinro and President of Shoals until
September 1999. In accordance with the incentive compensation plan, for 1999, in
addition to annual base salary of $400,000, Mr. Webster received 7.3% of the
amount by which the aggregate earnings before interest and taxes (without
deduction for costs of corporate administration or amortization of goodwill) of
Kinro through December 31, 1999 and Shoals through August 31, 1999 exceeded
$9,183,000. On April 5, 2000, Mr. Webster's employment agreement was amended.
See "ADOPTION OF INCENTIVE COMPENSATION
11
<PAGE>
PLAN" for a discussion of the proposal to adopt an incentive compensation plan
relating to Mr. Webster effective as of September 1, 1999.
For calendar 1999, Mr. Webster received base salary of $400,000, and
performance-based incentive compensation of $1,059,000. For 1999, Mr. Webster
also received a payment of $50,000 pursuant to a discretionary retirement bonus
program intended to provide retirement income. This bonus must be used to
purchase specified tax deferred annuities or cash value life insurance
contracts.
On October 7, 1997, L. Douglas Lippert entered into an Employment and
Non-Competition Agreement with Lippert Components, Inc. providing for
Mr. Lippert to serve as President and Chief Executive Officer of Lippert
Components, Inc. For 1999, Mr. Lippert received a salary of $300,000. Mr.
Lippert is also entitled to receive, subject to certain conditions,
performance-based incentive compensation equal to 5% of the excess of operating
profits of Lippert Components, Inc. and Coil Clip, Inc. (as defined in the
Agreement) over $10.1 million. For 1999, Mr. Lippert received $240,807 as
incentive compensation. Effective January 1, 2000, Mr. Lippert's annual salary
was increased to $400,000, and the Agreement was extended to October 2003.
Other Executive Officers of the Company and its subsidiaries receive
bonuses based upon their respective levels of organizational responsibility and
the performance of the Company or the subsidiary by which they are employed.
STOCK OPTIONS
The Company's Stock Option Plan provides for the grant of options to
employees of the Company and its subsidiaries, and to directors of the Company,
to purchase the Company's Common Stock. See "Election of Directors--Stock Option
Plan." A Stock Option Committee consisting of Edward W. Rose, III, James F.
Gero, and Gene H. Bishop administers the Stock Option Plan and determines and
designates employees and directors who are to be granted options. The Stock
Option Plan provides for automatic awards of options to members of the Stock
Option Committee under certain circumstances.
Because all options which have been granted under the Stock Option Plan
have been granted at fair market value, any value which is ultimately realized
by Executive Officers through stock options is based entirely on the Company's
performance, as perceived by investors in the Company's Common Stock who
establish the price for the Common Stock on the open market.
BENEFITS
The Company maintains certain broad-based employee benefit plans in which
Executive Officers participate, including an employee retirement savings plan
(401(k) Plan) and other retirement, life, disability and health insurance plans.
The Company also provides an automobile or automobile allowance to its Executive
Officers. The incremental cost to the Company of these benefits is less than 10%
of the Executive Officers' 1999 base salaries.
CONCLUSION
A significant portion of the Company's executive compensation is linked
directly to individual performance and Company earnings. The Committee intends
to continue to determine compensation based upon these factors.
COMPENSATION COMMITTEE
Edward W. Rose, III
James F. Gero
Gene H. Bishop
12
<PAGE>
EMPLOYEE STOCK PURCHASE PLAN
A total of 500,000 shares of Common Stock of the Company may be made
available for purchase by regular full-time employees of the Company under the
1995 Employee Stock Purchase Plan. No shares have been made available for
purchase under the Stock Purchase Plan.
COMPARATIVE STOCK PERFORMANCE
The following graph compares, for the last five calendar years, the
cumulative stockholder return on the Common Stock of the Company with the
cumulative return on the common stocks of the companies included in the Russell
2000 Index and on the common stocks of a representative peer group of companies
engaged in similar businesses as the Company.
The graph assumes investment of $100 on December 31, 1994 in the Company's
Common Stock, the Russell 2000 Index, and the common stocks of the peer group
companies, and assumes that any dividends were reinvested.
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
AMONG DREW INDUSTRIES INCORPORATED, THE RUSSELL 2000 INDEX
AND A PEER GROUP
[GRAPH]
Research Data Group Peer Group Total Return Worksheet
DREW INDS INC
Cumulative Total Return
---------------------------------------------
12/94 12/95 12/96 12/97 12/98 12/99
DREW INDUSTRIES INCORPORATED 100.00 167.16 262.69 304.48 277.61 214.93
PEER GROUP 100.00 149.67 199.31 211.09 235.08 159.43
RUSSELL 2000 100.00 127.49 154.73 203.91 190.75 187.92
* $100 INVESTED ON 12/31/94 IN STOCK OR INDEX*
INCLUDING REINVESTMENT OF DIVIDENDS.
FISCAL YEAR ENDING DECEMBER 31.
INDEMNIFICATION
Section 145 of the Delaware General Corporation Law empowers a domestic
corporation to indemnify any of its officers, directors, employees or agents
against expenses, including reasonable attorney's fees, judgments, fines and
amounts paid in settlement which were actually and reasonably incurred by such
person in connection with any action, suit or similar proceeding brought against
them because of their status as officers, directors, employees or agents of the
Company if such person acted in good faith and in a manner such person
reasonably believed to be in or not opposed to the best interests of the
Company. If the claim was brought against any such person by or in the right of
the Company, the Company may indemnify such person for such
13
<PAGE>
expenses if such person acted in good faith and in a manner reasonably believed
by such person to be in or not opposed to the best interests of the Company,
except no indemnity shall be paid if such person shall be adjudged to be liable
for negligence or misconduct unless a court of competent jurisdiction, upon
application, nevertheless permits such indemnity (to all or part of such
expenses) in view of all the circumstances.
The Company's Restated Certificate of Incorporation provides that the
Company may indemnify its officers, directors, employees or agents to the full
extent permitted by Section 145 of the Delaware General Corporation Law.
Accordingly, no director of the Company is liable to the Company or its
stockholders for monetary damages for breach of fiduciary duty as a director,
except for liability (i) for any breach of the director's duty of loyalty to the
corporation or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) under
Section 174 of the Delaware General Corporation Law, or (iv) for any transaction
from which the director derived an improper personal benefit.
II. ADOPTION OF INCENTIVE COMPENSATION PLAN
INTRODUCTION
Under Section 162(m) of the Internal Revenue Code of 1986, as amended (the
"Code"), restrictions apply to the deductibility of executive compensation paid
by public companies. Under these restrictions, the Company is not able to deduct
compensation paid to any of its five most highly compensated executive officers
in excess of $1,000,000 unless the compensation meets the definition of
"performance-based compensation" set forth in the Code. Non-deductibility would
result in additional tax costs to the Company and its stockholders. The
stockholder approval requested by this proposal will assist in enabling
incentive compensation awards to meet the requirements to qualify as
"performance-based compensation," thereby enabling the Company to achieve
maximum tax deductibility for such compensation costs.
INCENTIVE COMPENSATION PLAN
The incentive compensation plan relates to David L. Webster (the
"Designated Executive"), President of Kinro, Inc., a subsidiary of the Company.
The purpose of the incentive compensation plan is to promote the success of the
Company by providing an incentive to the Designated Executive that links his
compensation to the financial success of the Company and to growth in
stockholder value. For 1999, Mr. Webster received a base salary of $400,000 and
an incentive compensation award of $1,059,000. Mr. Webster also received a
payment of $50,000 pursuant to a discretionary retirement bonus program.
A revised incentive compensation plan was recommended by the Compensation
Committee of the Board of Directors and adopted by the Board of Directors on
April 5, 2000, effective as of September 1, 1999. The incentive compensation
plan amends the existing incentive compensation plan to give effect to the
September 1999 transfer of management of the tire and axle business conducted by
Shoals Supply, Inc. from Kinro to Lippert because the business is more closely
related to the business of Lippert. The name of the operation was changed to
Lippert Tire & Axle, Inc. In considering the plan, the Compensation Committee
utilized information relating to corporate performance, total return to
stockholders of comparable companies, and compensation afforded to executives by
comparable companies. The Compensation Committee used this information in
determining the range of minimum to maximum compensation which the Designated
Executive should receive.
To qualify as "performance-based compensation," the tax rules require, for
performance plans involving cash awards, that the performance goals under which
the incentive compensation is to be paid be disclosed to, and approved by, the
Company's stockholders. Accordingly, approval of the following performance goals
for incentive compensation to be awarded to the Designated Executive is
requested.
The amended incentive compensation plan provides that, commencing
January 1, 1999, in addition to annual base salary of $400,000, the Designated
Executive will receive (i) for the year ending December 31, 1999 (A) 7.3% of the
amount by which the aggregate earnings before interest and taxes (without
deduction for costs of corporate administration or amortization of goodwill)
("Operating Profit") of Kinro and Shoals for the eight months ended August 31,
1999 exceeds $7,237,000, plus (B) 7.3% of the amount by which the Operating
Profit of Kinro for the four months
14
<PAGE>
ended December 31, 1999 exceeds $1,946,000; (ii) for the year ending
December 31, 2000, 7.3% of the amount by which the Operating Profit of Kinro
exceeds $5,837,000; and (iii) for each year commencing with the year ending
December 31, 2001 and terminating on December 31, 2004, 5% of the amount by
which the Operating Profit of Kinro exceeds $5,837,000.
VOTE
The favorable vote of a majority of the votes cast at the Annual Meeting is
required to approve the adoption of the performance goals and incentive
compensation plan.
Management recommends that you vote FOR approval of the adoption of the
performance goals and incentive compensation plan.
III. APPOINTMENT OF AUDITORS
It is proposed that the stockholders ratify the appointment by the Board of
Directors of KPMG LLP as independent auditors for the purpose of auditing and
reporting upon the consolidated financial statements of the Company for the year
ending December 31, 2000. It is expected that a representative of that firm will
be present at the Annual Meeting of Stockholders to be held on May 17, 2000 and
will be afforded the opportunity to make a statement and respond to appropriate
questions from stockholders present at the meeting.
Management recommends that you vote FOR ratification of the appointment of
KPMG LLP as independent auditors for the year ending December 31, 2000.
IV. TRANSACTION OF OTHER BUSINESS
As of the date of this Proxy Statement, the only business which Management
intends to present or knows that others will present at the meeting is that set
forth herein. If any other matter or matters are properly brought before the
meeting, or any adjournment or postponement thereof, it is the intention of the
persons named in the form of Proxy solicited from holders of the Common Stock to
vote the Proxy on such matters in accordance with their judgment.
STOCKHOLDER PROPOSALS
All proposals which stockholders of the Company desire to have presented at
the Annual Meeting of Stockholders to be held in May 2001 must be received by
the Company at its principal executive offices on or before February 1, 2001.
By Order of the Board of Directors
EDWARD W. ROSE, III
Chairman of the Board of Directors
April 17, 2000
15
<PAGE>
DREW INDUSTRIES INCORPORATED
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS--MAY 17, 2000
THIS PROXY IS SOLICITED ON BEHALF OF MANAGEMENT
The undersigned, revoking any proxy heretofore given, hereby appoints
LEIGH J. ABRAMS and FREDRIC M. ZINN, or either of them, proxies of the
undersigned, with full power of substitution, with respect to all the shares of
the Common Stock which the undersigned is entitled to vote at the Annual Meeting
of Stockholders of Drew Industries Incorporated, to be held at the Hotel
Crescent Court, Second Floor, 400 Crescent Court, Dallas, Texas 75201 on
May 17, 2000 at 9:30 A.M. and at any adjournment or postponement thereof, upon
the following items as set forth in the Notice of Annual Meeting and Proxy
Statement, and in their discretion on any other matter that may properly come
before the meeting or any adjournment or postponement thereof.
(Continued and to be signed on the reverse side)
...............................................................................
FOLD AND DETACH HERE
<PAGE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR AUTHORITY TO VOTE FOR
DIRECTORS AND FOR PROPOSITIONS "2" AND "3."
1. ELECTION OF DIRECTORS FOR all named nominees WITHHOLD
NOMINEES: EDWARD W. ROSE, III, (except as indicated AUTHORITY
LEIGH J. ABRAMS, DAVID L. WEBSTER, L. to the contrary below) from
DOUGLAS LIPPERT, JAMES F. GERO, nominees
GENE H. BISHOP, J. THOMAS SCHIEFFER. [ ] [ ]
(INSTRUCTION: To withhold authority to vote for any individual nominee write
that nominee's name on the space provided below.)
----------------------------------------------------------------
2. TO APPROVE THE FOR AGAINST ABSTAIN
INCENTIVE COMPENSATION [ ] [ ] [ ]
PLAN.
3. TO RATIFY THE APPOINTMENT FOR AGAINST ABSTAIN
OF KPMG LLP [ ] [ ] [ ]
AS INDEPENDENT AUDITORS.
Please sign exactly as name appears hereon. If the stock is registered in the
names of two or more persons each should sign. Executors, Administrators,
Trustees, Guardians, Attorneys, and corporate officers should add their titles.
Please check if you plan to attend the meeting [ ]
<TABLE>
<S> <C> <C>
Dated: , 2000
- -------------------------- -------------------------- ------------------
SIGNATURE OF SHAREHOLDER SIGNATURE OF SHAREHOLDER
</TABLE>
Please mark boxes /x/ in blue or black ink. This Proxy should be returned to:
ChaseMellon Shareholder Services, L.L.C., 85 Challenger Rd., Overpeck Center,
Ridgefield Park, New Jersey 07660
FOLD AND DETACH HERE
